NEWCASTLE, SOUTH AFRICA +– ArcelorMittal South Africa has warned that its long steel operations could shut down by the end of September, after negotiations with the government failed to yield a solution to the company’s ongoing financial strain.
The steelmaker, which runs major plants in KwaZulu-Natal and near Johannesburg, reported on Monday that efforts to address the structural challenges threatening its viability have made little headway. The operations, which support the construction, mining, manufacturing, and automotive sectors, are running at a loss due to low domestic demand, high power costs, poor rail logistics, and surging imports.
Initially announced in November 2023, the planned closure of the plants has been delayed twice. The latest extension followed a cash injection of R1.683 billion by the state-owned Industrial Development Corporation in March this year. However, ArcelorMittal says that unless significant progress is made soon, operations cannot continue beyond 30 September.
Trade and Industry Minister Parks Tau told Parliament on July 4 that government was scrambling to prevent the closure and its potential economic fallout, including the loss of 3,500 jobs.
The company also revealed that more than 35% of South Africa’s steel demand is now filled by imports, particularly from China, while Transnet’s deteriorating freight rail service has sharply increased operating risks.
ArcelorMittal South Africa expects to post a headline loss per share between 89 and 99 cents for the six months ending 30 June, an improvement from the R1.00 per share loss during the same period last year. Sales volumes for the first half of 2025 dropped by about 10% year-on-year. The company will release its half-year results on July 31.
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